A Model Of Stability In Lingering Recession

April 21, 2009

The Associated Press is shining a glowing light on Newport News, in a story that touts the city's recent victories in bringing more than 3,000 new, high-paying jobs to the region. As dreary as most of the recent economic news has been, this comes as a breath of fresh air. And it has to make you wonder - Is Newport News becoming the new "It" city? Here's the story, written by the AP's Bob Lewis:

NEWPORT NEWS - In the midst of the worst economic funk since the Great Depression, blue-collar cities like this major manufacturer of aircraft carriers and submarines are in dire times.

But Newport News is not only holding on to its staple jobs, it's landed commitments for corporate expansions expected to create 3,360 new jobs.

And they're lucrative jobs, with companies such as optics and graphics giant Canon, German auto parts maker Continental AG and a joint venture between French nuclear power company AREVA and Northrup Grumman, owner of the massive shipworks that has been the city's backbone for 140 years.

The public sector is in the game, too. The Department of Energy is investing $400 million into the massive atom smasher at Jefferson Lab, and Fort Eustis is expanding to handle duties transferred there in the latest round of base realignments and closures.

Most of the jobs are expected go online in 2009 and 2010, with construction of the new facilities slated to be the first jobs created.

Growth in a city that melds lunch-pail, unionized steelworkers and atomic science? What gives?

Several factors are in play, from aggressively pro-business state and local governments to a long and favorable track record with the city's work force, said Old Dominion University economist and researcher Larry Filer. And then there's just being in the right place at the right time.

"One thing that seems to be a recurrent theme here, particularly with the five projects from last year, is they were all by companies that have had a presence in Newport News for years," Filer said after presenting results of a study he did on the economic benefits of the new projects.

"It seems that developing that relationship gives these firms a level of comfort and allows them to go to corporate headquarters and make a pitch to expand."

Filer's study shows that by 2012, the incoming jobs will add $162 million in new compensation, and its ripple effect will yield tens of millions of dollars more. The new jobs will pay so well, Filer's study estimates, it will boost the average weekly wage on the Peninsula from $711 to $916.

Access to job training at two of the region's community colleges, Thomas Nelson and Tidewater, is a major incentive, said Christie Miller, of the Virginia Economic Development Partnership. Another asset the region offers for corporations with military and technology ties is a high number of military retirees.

"They have a military perspective, they're highly skilled and a lot of them already have the security clearances some of these companies are looking for now," Miller said.

As it has for 123 years, the shipyard anchors the Newport News economy. Its 19,000 employees are the lone supplier of aircraft carriers and one of only two makers of submarines on 550 acres spanning two miles of James River shoreline. It is Virginia's largest industrial employer.

The steady demand for naval might immunizes defense contractor Northrup Grumman from some of the perils that pushed automakers and other heavy industries to the brink of collapse.

Mike Petters, president of Northrup Grumman Shipbuilding, says the nature of the business helps, but local factors figure in. The company and the United Steelworkers have enjoyed a peaceful, cooperative relationship since a 17-week strike 10 years ago, he said.

Alton H. Glass - a member of USW Local 8888 for nearly 30 years, from his time as a welder on the shipyard production line through nearly two terms as president - agreed. The company listens to labor's input and uses it in running the business, he said.

"We have labor-management meetings, and we all talk about where we're going. That doesn't mean we always agree on everything, but when you can talk with each other, you can resolve problems," said Glass, whose union last fall signed a four-year contract with the company.

Then there are local governments known for looking after its corporate constituents, Petters said. "We've raised our hand on several occasions and said here's a way you can help us develop a new product line - new hiring requirements, new training requirements - and they have been very receptive to those ideas."

Canon Inc. began the run of good fortune for Newport News in May, announcing a $600 million project to create 1,000 jobs in a new plant that will produce toner cartridges for its printers.

In September, Fort Eustis, the new home of the Army's Training and Doctrine Command, received $195 million to build the command's new operations center and headquarters. AREVA NP and Northrup Grumman in October sealed a partnership to build components that will go into nuclear power plants to be built in North America. It will generate 540 new jobs in the next four years.

But most of those jobs haven't arrived yet. Until they do, Newport News continues to feel the pain of rising unemployment.